
Qass_ 
Book_ 



BTU?49 
.FiLK5 



2- 



No. . 

Id the District Court of the United States for the 

of Minnesota. *± 




. , ' / Mb* r 



The United States of America, petitioner, 

V. 

International Harvester Company and others, 

defendants. 



PETITION IN EQUITY. 



CHARLES C. HOTTPT, 

United States Attorney. 
GEORGE W. WICKER SHAM, 

Attorney General. 

JAMES A. FOWLER, 

Assistant to the Attorney General. 
EDWIN P. GROSVENOR, 

Special Assistant to the Attorney General. 



WASHINGTON : GOVERNMENT PRINTING OFFICE ! 1912 






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\ 

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In the District Court of the United States for the 

of 



The United States of America, 

petitioner, 

v. 

International Harvester Com- 

pany and others, defendants. 



y No. 



ORIGINAL PETITION. 



To the honorable judges of the District Court of the 
United States for the District of Minnesota, sitting 
in equity: 

The United States of America, by Charles C. 
Houpt, its attorney for the district of Minnesota, 
acting under the direction of the Attorney General, 
brings this proceeding in equity against Interna- 
tional Harvester Company, International Harvester 
Company of America, International Flax Twine Com- 
pany, Wisconsin Steel Company, The Wisconsin Lum- 
ber Company, Illinois Northern Railway, The Chi- 
cago, West Pullman & Southern Railroad Company, 
Cyrus H. McCormick, Charles Deering, James Deer- 
ing, John J. Glessner, William H. Jones, Harold F. 
McCormick, Richard F. Howe, Edgar A. Bancroft, 



40638—15 



George F. Baker, William J. Louderback, Norman 
B. Ream, Charles Steele, John A. Chapman, Elbert 
H. Gary, Thomas D. Jones, John P. Wilson, William 
L. Saunders, George W. Perkins. 

The defendants above named, engaged in interstate 
trade and commerce in harvesting and agricultural 
machinery, tools and implements and binder twine, 
are violating the provisions of the act of Congress 
passed July 2, 1890, entitled "An act to protect 
trade and commerce against unlawful restraints and 
monopolies/ ' and this proceeding is instituted to 
prevent and restrain the hereinafter particularly de- 
scribed agreements, contracts, combinations, and con- 
spiracies in restraint of, and restraints upon, interstate 
trade in such articles; the attempts to monopolize, 
and the contracts, combinations, and conspiracies to 
monopolize, and the existing monopolizations of 
parts of trade and commerce among the several 
States in such commodities. 

On information and belief, your petitioner alleges 
and shows: 

I. 

International Harvester Company is a corporation 
organized under the laws of New Jersey, with its 
principal offices at Chicago, III, in the Harvester 
Building. 

International Harvester Company of America is a 
corporation organized under the laws of Wisconsin, 
with its principal offices at Chicago, 111., in the 
Harvester Building. 



International Flax Twine Company is a corporation 
organized under the laws of the State of Minnesota, 
with its principal office at St. Paul, Minn. 

The Wisconsin Steel Company is a corporation 
organized under the laws of the State of Wisconsin, 
and has offices at Chicago, 111., in the Harvester 
Building. 

The Wisconsin Lumber Company is a corporation 
organized under the laws of the State of Wisconsin, 
and has offices at Chicago, 111., in the Harvester 
Building. 

Illinois Northern Railway is a corporation organized 
under the laws of the State of Illinois, with its prin- 
cipal office in Chicago, 111. 

The Chicago, West Pullman & Southern Railroad 
Company is a corporation organized under the laws 
of the State of Illinois, with its principal office in 
Chicago, 111. 

Said defendants will be hereinafter referred to as 
" corporation defendants" and " defendants." 

The individuals made defendants herein and here- 
inafter called " individual defendants" and " defend- 
ants" have been for a long time and now are directors 
of said International Harvester Company, attend the 
meetings of the board of directors at the Harvester 
Building, Chicago, participate in the direction and 
management of its business, and are responsible 
therefor. 

Defendant Cyrus H. McCormick has been since its 
organization president of International Harvester 
Company, one of the three voting trustees hereinafter 



more particularly referred to, and a member of the 
finance committee of that company. He has been 
since September, 1902, president and one of the 
directors of the International Harvester Company of 
America. 

Defendant Charles Deering has been since its 
organization chairman of the board of directors of 
the Harvester Company, one of the three voting trus- 
tees, and a member of the finance committee. He 
has been since September, 1902, chairman of the 
board of directors and one of the directors of the 
International Harvester Company of America. 

Defendants James Deering, John J. Glessner, 
William H. Jones, and Harold F. McCormick have 
been since its organization vice presidents of the 
International Harvester Company, and also since 
September, 1902, vice presidents and directors of the 
International Harvester Company of America. 

Defendant Richard F. Howe has been since its 
organization secretary of the International Har- 
vester Company, and since September, 1902, secre- 
tary of the International Harvester Company of 
America, and a director of that company. 

Defendant George W. Perkins has been since the 
organization of the International Harvester Company 
one of the three voting trustees and a member of the 
finance committee. He has also been since Sep- 
tember, 1902, a director of the International Har- 
vester Company of America. 

The defendants, George F. Baker, Elbert H. Gary, 
and Norman B. Ream, have been for a long time and 



now are members of the finance committee and 
directors of the International Harvester Company. 

The defendant, Edgar A. Bancroft, is a director 
of and general counsel for the International Har- 
vester Company. 

II. 

The object of this suit is to remove the restraints 
which defendants herein have imposed upon trade 
and commerce in agricultural machinery and im- 
plements and more particularly upon commerce 
among the several States in harvesting machinery 
and binder twine. 

Harvesting implements constitute the most im- 
portant class of the several classes of agricultural 
tools and implements. Agricultural implements, 
broadly speaking, may be divided in five classes, as 
follows : 

1. Tillage implements, designed to prepare the 
soil for seeding, such as plows and harrows, and im- 
plements designed to keep the soil in good condition, 
such as cultivators. 

2. Seeding implements used in the planting and 
sowing of the crops — for instance, drills and seeders 
and corn planters. 

3. Harvesting implements, designed to aid the 
harvesting of the corps. These include harvesters 
or binders, mowers, reapers, rakes, and similar im- 
plements. 

4. Threshing machinery. 

5. Implements and machinery designed for general 
agricultural use, such as wagons, manure spreaders, 



gasoline engines, cream separators, tractors, and the 
smaller implements, such as hoes, forks, hand rakes, 
binder twine, and kindred lines. 

In many States the farmer's expenditures for har- 
vesting machinery and twine aggregate considerably 
more than 50 per cent of the total expense incurred 
by him in purchasing agricultural machinery and 
implements of all kinds. That is to say, including 
only such agricultural machinery as is essential to 
successful farming, it is necessary that the farmer 
invest in the purchase of harvesting machinery and 
binder twine more than half the capital that he puts 
into all kinds of agricultural machinery. 

As a rule agricultural implements are ■ sold by 
the manufacturer to the retail implement dealer and 
by the latter to the farmer. The wholesaler or 
jobber, so prominent in other industries, plays but a 
small part in the distribution of agricultural imple- 
ments from the manufacturer to the farmer. 

Almost every city, town, village and hamlet in the 
United States has one or more retail implement dealers. 
These buy directly from the manufacturer and sell 
directly to the farmer. Their relation to the manu- 
facturer may be that of his agent instead of a pur- 
chaser from him, but in any event usually no jobber 
intervenes. 

Generally speaking, these implement dealers handle 
all classes of agricultural machines and implements, for 
the profits on a few sales of one class would not enable 
the implement dealer to exist. 

It follows that a monopoly acquired in one of the 
classes of agricultural machinery, particularly har- 



vesting machinery, may easily form the basis of a 
monopoly of the other classes. The implement 
dealer must be able to sell each class in order to con- 
tinue in business. A combination controlling the 
output and distribution of harvesting implements 
may expand into the other classes of agricultural im- 
plements and acquire a monopoly therein by with- 
holding from the dealer its harvesting implements if 
he refuse to buy the combination's added lines of 
agricultural machinery. 

Prior to 1902 there were 10 or 12 establishments 
for the manufacture and sale of harvesting imple- 
ments in successful operation in the United States, 
notably at Chicago, where there were several ; Akron 
and Springfield, Ohio; Milwaukee, Wis.; Sterling, 111.; 
Auburn, N. Y. ; St. Paul, Minn. ; and West Pullman, 
111. These were separate and independent. They 
sold, shipped, and distributed their products through- 
out the United States to implement dealers and 
others, all as a part of interstate commerce and in 
active and open competition. Each had agents in 
the several States soliciting the business of the im- 
plement dealers, and no one concern controlled the 
supply of harvesting machines. 

By advertisement and otherwise the trade names 
of many harvesting machines, particularly binders, 
mowers, rakes, and reapers, had become generally 
known to farmers. These well-known and standard 
types of machines commanded many purchasers 
without special reference to the actual manufacturer; 



8 

in fact, the well-advertised popular binders and 
mowers have in a sense come to be staples in the 
business of the implement dealer, without which the 
implement dealer can only with great difficulty, if 
at all, build up or maintain a successful business. 

Interstate trade and commerce in harvesting and 
agricultural implements for a long time grew and 
expanded along the general lines described, and but 
for the combinations, conspiracies, attempts to mo- 
nopolize, monopolies, and other unlawful practices 
hereinafter stated would have so continued, to the 
great advantage of farmers and the general public. 

III. 

Before 1902 the aggregate annual output of five 
separate concerns manufacturing and selling har- 
vesting machinery and twine, including binders, 
mowers, reapers, rakes, etc., amounted to over 85 per 
cent of all of the harvesting machinery and more than 
50 per cent of all of the binder twine produced and 
sold in the United States. These concerns were 
McCormick Harvesting Machine Company, an Illinois 
corporation, capital stock, $2,500,000, with factories 
and plants located at Chicago, 111. ; the Deering Com- 
pany, a copartnership, with factories at Chicago, 111. ; 
the Piano Manufacturing Company, an Illinois cor- 
poration, capital stock, $1,000,000, with factory at 
West Pullman, 111.; Warder, Bushnell & Glessner Com- 
pany, an Ohio corporation, capital stock, $3,000,000, 
with factory at Springfield, Ohio; Milwaukee Har- 



9 

vester Company, a Wisconsin corporation, capital 
stock, $1,000,000, with factory at Milwaukee, Wis. 

Each of the five — independent and in unrestrained 
competition with all others likewise engaged — had 
established ' a successful, profitable, and expanding 
business. Each company sold and shipped its prod- 
ucts, harvesting machinery and twine, from the place 
of manufacture to States of the United States other 
than the States wherein the products had been manu- 
factured. The five companies had agents through- 
out the United States soliciting orders of their 
products which were then shipped pursuant to such 
orders from their respective factories to the pur- 
chasers. All these companies sold and shipped their 
machines generally throughout the United States, 
and so were engaged in commerce among the several 
States in harvesting machinery and twine within the 
meaning of the act of Congress of July 2, 1890, 
commonly called the " Sherman Antitrust Act." 

In July, 1902, defendants Cyrus H. McCormick, 
Charles Deering, John J. Glessner, William H. Jones, 
George W. Perkins, and others, nearly all of whom 
were owners, officers, directors, stockholders, and 
agents of the five concerns above named, believing 
combination would yield large profits, determined to 
bring it about, destroy existing competition among the 
five concerns, and through combinations and agree- 
ments in restraint of trade to exclude all others, 
secure control of and monopolize interstate trade 
and commerce in harvesting machinery and twine. 

40638—12 2 



10 

They further determined that when they had accom- 
plished the purpose just mentioned they should ex- 
pand into other classes of agricultural machinery, 
and finally monopolize interstate trade and commerce 
in agricultural machinery of all kinds, their purpose 
being to use the power obtained by a monopoly of 
trade in harvesting machinery in such a way as to 
acquire a similar monopoly in other classes of agri- 
cultural machinery. 

The combination was to take the form of a corpo- 
ration to be created under the law of such a State 
as permitted to its corporations the widest powers, 
to which corporation the five concerns named above 
were to transfer all their property and business as 
going concerns; the individuals who owned and 
controlled these concerns were to receive as the 
consideration for such transfer shares of the capital 
stock of the new corporation and no other consid- 
eration. Thereafter this corporation was to carry on 
as one business the business of the five concerns 
which had theretofore been competing. 

Accordingly in July, 1902, with the unlawful 
objects and purposes just mentioned, the McCormick 
Harvester Company, The Deering Company, the 
Piano Manufacturing Company, and Warder, Bush- 
nell & Glessner Company executed with one W. C. 
Lane identical preliminary agreements to transfer 
their properties to Lane, selected by the parties as 
a mere conduit to the corporation which was to be 
the ultimate purchaser. 



11 

About the same time certain of the defendants, or 
others acting for the defendants, secured an option 
to purchase the plant, business as a going concern, and 
capital stock of the Milwaukee Harvester Company. 

The preliminary agreements referred to provided, 
among other things, that W. C. Lane, upon the 
acquisition of the properties, should sell them to 
a corporation thereafter to be organized; that the 
purchase price to be paid by Lane to each of the 
four vendor companies was to be payable in full- 
paid and nonassessable shares of the capital stock 
of the purchasing company, taken at par; that the 
new company was to have such corporate title, 
capital stock, organization, by-laws, directors, and 
committees as should be approved by J. P. Morgan 
& Company; that the amount of the capital stock 
was to be determined after the ascertainment of the 
aggregate value of all its assets; that the purchase 
was to take effect some day in September, 1902, 
and the performance of the contract completed 
prior to January 1, 1903; that the charter was to 
provide that the stockholders might enter into 
a voting trust; that the vendors should deposit 
with three trustees in a voting trust the stock of the 
purchasing company received as consideration for 
the conveyances, the trust to continue 10 years 
and the voting trustees to issue stock trust certifi- 
cates to the real owners of the shares. 

A copy of the preliminary agreement referred to 
above between the McCormick Harvesting Ma- 
chine Company and W. C. Lane, and dated July 28, 



12 

1902, is attached hereto as a part of this petition, 
marked " Exhibit 1." 

Accordingly, on August 12, 1902, the individuals 
and companies named caused to be incorporated the 
International Harvester Company under the laws of 
New Jersey with $120,000,000 capital stock, all the 
certificates of which were issued to W. C. Lane, who, 
on August 13, 1902, delivered them to three voting 
trustees, George W. Perkins, Cyrus H. McCormick, 
and Charles Deering, in trust for the individuals who 
had owned and transferred the properties of the four 
concerns to Lane, which properties were immedi- 
ately conveyed to the new company. Meanwhile the 
option on the property and business of the Milwaukee 
Harvester Company was exercised, that property was 
conveyed to Lane, on July 28, 1902, and subsequently 
by him transferred to the International Harvester 
Company, the new company. 

A copy of the voting trust agreement between 
W. C. Lane and the three trustees, Cyrus H. McCor- 
mick, Charles Deering, and George W. Perkins, dated 
August 13, 1902, is attached hereto as a part of this 
petition, marked " Exhibit 2." 

In due course the three trustees issued stock trust 
certificates to the persons entitled to the certificates 
of capital stock in the new company. Each stock 
trust certificate certifies that the holder thereof will 
be entitled to receive a certificate for a stated num- 
ber of fully paid shares of the capital stock of the 
International Harvester Company, and in the mean- 



13 

time to receive payments equal to the dividends col- 
lected by the voting trustees upon a like number of 
shares of the capital stock standing in the names of the 
trustees. It is provided in the stock trust certificates 
that until the actual delivery of the stock certificates 
the voting trustees shall possess, in respect of any 
and all such stock, and shall be entitled, in their 
discretion, to exercise all rights and powers of abso- 
lute owners of said stock. It is provided in the 
voting trust agreement that the action of a majority 
of the voting trustees expressed from time to time at 
a meeting or by writing with or without a meeting 
shall constitute the action of the voting trustees. 

The stock of the new company was allotted and 
received as follows (the same, however, being deliv- 
ered to the voting trustees and the real ownership 
thereof thereafter evidenced by the stock trust cer- 
tificates above described) : 

The total stock issued was $120,000,000. Of this 
stock, $53,400,000 was apportioned among the owners 
of the McCormick, Deering, Warder, Bushnell & 
Glessner, and Piano companies, in consideration of 
the transfer by each company of all its real estate, 
factories, plants, buildings, improvements, machin- 
ery, patterns, tools, apparatus, fixtures, patents, 
inventions, devices, patent rights, licenses, trade- 
marks, trade-names, and good will of all and singular 
said property as a going concern, and supplies, prod- 
ucts, and materials on hand, pending contracts, rail- 
road equipment, as well as all other property of the 
vendor appertaining to the vendor's business, except 
bills and accounts receivable. 



14 

Stock in the amount of $40,000,000 was appor- 
tioned among the owners of the McCormick, Deering, 
Piano and Warder, Bushnell & Glessner companies 
in consideration of the assignment by the vendor 
companies to the purchasing company of bills and 
accounts receivable, of like amounts, guaranteed by 
the vendors, or for cash. 

Stock in the amount of $3,148,196.66 was issued 
to J. P. Morgan & Company, of New York, who had 
paid that amount in cash to secure the property of 
the Milwaukee Harvester Company, which was con- 
veyed to the International Harvester Company, as 
stated above. 

Stock in the amount of $3,451,803.34 was issued 
to J. P. Morgan & Company for services rendered 
and for legal expenses. 

Stock in the amount of $20,000,000 was issued at 
par for cash, the subscribers being in large part 
owners of or persons interested in the four conveyor 
concerns named above. 

The articles of incorporation declare the purposes 
of the International Harvester Company as follows: 

The objects for which the corporation is 
formed are as follows, viz : 

To manufacture, sell, and deal in harvesting 
machines, tools, and implements of all kinds, 
including harvesters, binders, reapers, mowers, 
rakes, headers, and shredders; agricultural 
machinery, tools and implements of all kinds; 
binder twine, and all repair parts and other 
devices, materials and articles used, or in- 
tended for use, in connection with any kind of 



15 

harvesting or agricultural machines, tools, or 
implements. 

To engage in the manufacture or production 
of, and to deal in, any materials or products 
which may be used in or in connection with 
the manufacture of harvesting or agricultural 
machines, tools, and implements. 

To apply for, obtain, register, lease or other- 
wise acquire, and to hold, use, own, operate, 
sell, assign or otherwise dispose of, any trade- 
marks, trade names, patents, inventions, im- 
provements and processes used in connection 
with, or secured under, letters patent of the 
United States or of other countries or other- 
wise. 

The business or purpose of the corporation 
is, from time to time, to do any one or more of 
the acts and things herein set forth. 

Without in any particular limiting any of the 
powers of the corporation, it is hereby ex- 
pressly declared and provided that the cor- 
poration shall have power to guarantee any 
dividends or bonds, contracts or other obliga- 
tions; to make and perform contracts of any 
kind and description; and in carrying on its 
business, and for the purpose of attaining or 
furthering any of its objects to do any and all 
other acts and things, and to exercise any and 
all other powers which a natural person could 
do and exercise, and which now are or here- 
after may be authorized by law. 

The corporation shall have power to conduct 
its business in other States and Territories, 
and in foreign countries, and to have one or 
more offices out of the State of New Jersey, 



16 

and to hold, purchase, mortgage, and convey 
real and personal property both in and out of 
the State of New Jersey. 

***** 

All corporate powers shall be exercised by 
the directors except as otherwise provided by 
statute, or by this certificate. The by-laws 
may prescribe the number of directors neces- 
sary to constitute a quorum, which number 
may be removed at any time by vote of the 
directors, or by any committee or superior 
officer upon whom such powers of removal may 
be conferred by the by-laws or by vote of the 
directors. 

The directors by vote of a majority of the 
whole board may appoint from their number 
an executive committee and any other stand- 
ing committees, and such committees shall 
have and may exercise such powers as may be 
conferred or authorized by the by-laws, or by 
the directors. 

The defendant Cyrus H. McCormick, former presi- 
dent and director of the McCormick Harvesting 
Machine Company, became president of the new com- 
pany and has been its president since its organization. 
Defendant Charles Deering, formerly a member of the 
firm of the Deering Company, has been chairman of the 
board of directors of the International Harvester Com- 
pany since its organization. Defendants James Deer- 
ing, formerly a member of the Deering Company, 
Harold F. McCormick, formerly vice president of the 
McCormick Harvesting Company, John J. Glessner, 
formerly vice president of the Warder, Bushnell & 



17 

Glessner Co., and William H. Jones, formerly vice 
president of the Piano Manufacturing Company, have 
all been vice presidents of the International Harvester 
Company since its organization. Defendants Richard 
F. Howe, formerly a member of the Deering Company, 
and said Harold F. McCormick, have been, respec- 
tively, secretary and treasurer of the International 
Harvester Company since its organization. All the 
officers above named and also Stanley F. McCormick, 
formerly of the McCormick Harvesting Company, 
Cyrus Bentley, former attorney for the McCormick 
Company, and William Deering, former member of 
the Deering Company, became directors of the Inter- 
national Harvester Company upon its organization. 
Each of the directors and officers above named owned 
an interest and participated in managing one of the 
acquired concerns and was selected according to pre- 
liminary arrangement. 

The International Harvester Company was incor- 
porated as an instrumentality to effect the unlawful 
purposes of defendants, as a means of destroying 
competition, of unlawfully combining and confed- 
erating a number of independent manufacturers, 
dealers in and distributors of harvesting machinery, 
tools, and implements, and binder twine, and of 
creating a monopoly in interstate commerce therein. 

Having in the ways and for the purposes described 
acquired the five old concerns, the International Har- 
vester Company began and has continued to operate 
and control all their affairs in concert and agreement; 
and that corporation then became and with added 

40638—12 3 



18 

acquisitions has ever since been itself a combination 
in restraint of trade and commerce between the States. 
Thereafter the total output of the five concerns of 
harvesting machinery, tools, and implements and 
twine was sold, shipped, transported, and distrib- 
uted by one organization, and the machines of the 
several manufacturers were sold by defendants at 
the same prices; that is to say, one organization 
thereafter sold and distributed at the same prices 
all binders, mowers, etc., which prices competition 
had previously controlled; thenceforth defendants 
demanded and received the same price for a 
"McCormick," "Deering," "Piano," "Milwaukee," or 
"Champion" binder or mower; and thereby inter- 
state trade and commerce in harvesting machinery 
and twine was hindered and restrained. 

IV. 

About the middle of 1902, as previously stated 
the International Harvester Company, its officers 
and directors, defendants Cyrus H. McCormick, 
Harold F. McCormick, Charles Deering, James Deer- 
ing, Richard F. Howe, William H. Jones, John J. 
Glessner, George W. Perkins, Charles Steele, Elbert 
H. Gary, George F. Baker, Norman B. Ream, and 
others, entered into and became parties to, and 
engaged in a combination in unlawful restraint of 
interstate trade and commerce in harvesting machin- 
ery, tools, and implements, and binder twine, 
and by means thereof and otherwise monopo- 
lized said trade and commerce. Said defendants 



19 

and others who became associates ever since have 
been engaged in maintaining and perpetuating said 
illegal combination and monopoly in harvesting 
implements, and with expanding purpose to dominate 
allied industries have been unlawfully attempting to 
enlarge the monopoly then acquired by them and to 
monopolize interstate trade and commerce in agri- 
cultural machinery, tools, and implements of all 
kinds. 

In order to bring about the desired ends and with 
the above-enumerated purposes, defendants and their 
associates have adopted such means as seemed 
expedient; to enumerate all of them would too 
much encumber this petition. But, among others, 
the general lines of action, practice, operation, 
manipulation, and management hereinafter de- 
scribed have been and are now being followed, and 
unless prohibited will be continued hereafter. 

By means of the combination which was originated 
by defendants in 1902 and given the form of a New 
Jersey corporation, named the International Har- 
vester Company, the defendants at that time 
monopolized commerce in harvesting machines, par- 
ticularly harvesters or binders and mowers, reapers, 
and rakes, and in binder twine; the vast power ac- 
quired by virtue of that combination defendants 
have since used and are now using as a means to 
monopolize all other classes of agricultural machin- 
ery; one monopoly is to be a stepping stone to 
another monopolization. 

Since the formation of the combination in 1902 
defendants have attempted to eliminate all competi- 



20 

tors in the harvesting business, among other ways 
by defendants securing control of all the retail im- 
plement dealers in the United States, through con- 
tracts with such dealers, in the years 1903, 1904, and 
1905, making them exclusively sales agents of defend- 
ants and binding them under penalties not to sell 
or be interested in the sale of any grain binder, 
header, corn binder, husker, shredder, reaper, mower, 
stacker, sweep rake, hay rake, or hay tedder not 
manufactured by defendant International Harvester 
Company. In the years mentioned defendants con- 
cluded contracts of the character described with 
the great majority of retail implement dealers in the 
United States. 

In the years 1906, 1907, 1908, 1909, 1910, 1911, 
and down to and including the time of the filing of 
this petition, defendants have obtained and exer- 
cised a like control and domination over such dealers 
by means of agency contracts providing that the 
defendant International Harvester Company of Amer- 
ica, hereinafter described, may at any time, when it 
considers its interests are neglected or jeopardized, 
without notice, annul and terminate the agency con- 
tract and take possession of all accounts, moneys, 
machines, etc., in possession of the dealer by virtue 
of the contract. In the years mentioned, defendants 
concluded contracts of the character described with 
the great majority of the retail implement dealers in 
the United States and defendants have used and are 
now using the power given by the termination clause 
of such contracts in order to force such dealers to 



21 

handle only the harvesting and other machines of 
defendants and to refrain from handling or promot- 
ing the sale of the machines of competitors. 

By reason of the fact that defendants manufacture 
the well-known and standard types of harvesting 
machines and implements, without which the imple- 
ment dealer can only with great difficulty, if at all, 
maintain a successful business, defendants have been 
and now are enabled to compel such implement deal- 
ers to enter into contracts of the character described. 

In towns where there are more than one retail 
implement dealer defendants have adopted and are 
now carrying out the policy of giving to each dealer 
the exclusive agency for a certain well-known 
machine, such as the "McCormick" or "Deering" 
grain binder or mower, instead of giving to one 
dealer an agency for all defendants' lines, intending 
thereby to obtain for themselves the services of all 
responsible implement dealers, and, by means of the 
contracts hereinbefore described, to monopolize all 
trade and commerce in harvesting and agricultural 
implements. 

Since defendants acquired a monopoly of harvest- 
ing machinery, they have expanded into other lines 
of agricultural implements and are now engaged in 
securing a monopoly of those lines, among other ways 
by threats to dealers to withhold from them the har- 
vesting implements of the combination unless given 
special treatment and preference in respect to the 
new lines of agricultural machinery manufactured by 
defendants, or by allowing special confidential com- 



22 

missions on harvesting machinery to such dealers, or 
by giving unusual credit, or by the exercise of the 
power given by the annulment clause in the contracts 
above described. 

Defendants, with the purpose to dominate the 
industry of manufacturing, selling and distributing 
harvesting and agricultural machinery and imple- 
ments and twine, have purchased and absorbed 
competitors as hereinafter stated. The making of 
the types of harvesting and agricultural machinery 
acquired by these purchases has been abandoned 
to the extent hereinafter stated. 

The power in combination of defendants in inter- 
state commerce in harvesting machinery and twine 
deters and prevents others from becoming competi- 
tors therein, and has made effective competition 
with defendants in harvesting machinery impossible, 
and in other lines of agricultural machinery well 
nigh impossible. 

Defendants have concealed their ownership of con- 
trolled companies, have procured and permitted the 
same to be held out and advertised as wholly inde- 
pendent and without connection with them, the 
"Trust" or any "Combination," intending thereby 
to mislead, deceive, and defraud the public and more 
effectually cripple existing competitors and keep out 
new ones. 

Defendants have resorted to unfair trade methods ; 
have made inaccurate and misleading statements 
concerning rival machines or concerning the credit of 
competitors; have by misrepresentations sought to 



23 

induce competitors' agents and dealers to abandon 
them, and in divers unfair ways have endeavored to 
destroy them, and for the purpose of destructive 
competition have reduced prices of their machines 
in some localities below cost of production and dis- 
tribution while keeping prices up in other localities. 
Defendants have systematically bought up patents 
upon harvesting machinery, tools, and implements, 
and acquired all new inventions therein, in order 
thereby more effectually to perpetuate the combina- 
tion and monopoly hereinbefore described. 

V. 

Defendant, the International Harvester Company of 
America, is the successor of the Milwaukee Harvester 
Company, a Wisconsin corporation, which, as stated 
above, conveyed its property and business through 
J. P. Morgan & Co. and W. C. Lane to the new company, 
International Harvester Company of New Jersey, in 
August, 1902. Some weeks thereafter, in pursuance 
of the general purposes of defendants, the new com- 
pany transferred all the shares of capital stock of the 
Milwaukee Harvester Company, to the three voting 
trustees in trust for the stockholders of the Inter- 
national Harvester Company, changed the name of 
the Milwaukee company to International Harvester 
Company of America, and then concluded with it 
an exclusive contract for the sale in the United 
States of the entire output of the International 
Harvester Company. Under this arrangement, which 
is in force to-day, the International Harvester Com- 



24 

pany of America buys from the manufacturing com- 
pany all the agricultural and harvesting implements, 
twine, and other articles manufactured bv the 
latter and sells the same to implement dealers and 
others located throughout the United States, or 
makes such implement dealers its agents for their 
sale to the farmer. 

The International Harvester Company of America is 
merely the selling department of the other interna- 
tional company. Since its acquisition by the Inter- 
national Harvester Company it has paid no dividends 
upon its capital stock, $1,000,000. It buys and sells 
at the prices fixed by the parent company. The offi- 
cers of the two companies have been the same since 
September, 1902. The nine directors of the subsidiary 
are also directors of the larger company. In fact, the 
Wisconsin company is a bookkeeping arrangement, 
given the form of a corporate entity, with a small 
capitalization, for the purpose of enabling the larger 
company to do business in States from which it is 
debarred by reason of its huge capitalization. 

The arrangement between the International Har- 
vester Company and International Harvester Com- 
pany of America was further devised and is now be- 
ing carried out by the defendants for the purpose of 
giving to the New Jersey company the appearance of 
not being engaged in interstate commerce; in other 
words, in order to accomplish an ostensible segregation 
of the manufacturing or intrastate business of the cor- 
poration from its distributing or interstate business, 
thereby securing to the latter protection against the 



25 

laws of the several States which have for their object 
the suppression of monopolies or their exclusion from 
their borders. 

The International Harvester Company of America 
has been and is being used by the International Har- 
vester Company and the other defendants as a mere 
instrumentality in carrying out and effecting the 
monopolistic purposes of defendants and the restraints 
of interstate trade and commerce above described. 

VI. 

In January, 1903, in pursuance of the general 
purpose of defendants, defendant, International Har- 
vester Company, acquired, through purchase of all 
the capital stock of and subsequent conveyance from 
D. M. Osborne & Co., a New York corporation, with 
a plant at Auburn, N. Y., engaged in interstate 
trade and commerce in harvesting machinery, twine, 
and tillage implements, and in manufacturing, selling, 
and distributing harvesting machinery, twine, and 
tillage implements throughout the United States in 
competition with it, all grantor's business of manu- 
facturing and selling, dealing in and distributing har- 
vesting machinery and twine as a going concern, 
all assets, property, and good will and the exclusive 
right to use the corporate name, paying therefor cash 
and five-year notes. The principal owners of the 
grantor company, long successfully engaged in man- 
ufacturing and selling harvesting machinery, agreed 
with grantee to enter its service for a certain period 
in managing the business and property acquired and 

40638—12 4 



26 

not otherwise or thereafter to engage in or carry on 
or become interested in the business of manufactur- 
ing or dealing in harvesting machinery. 

After the five concerns had gone into the Inter- 
national Harvester Company, the Osborne Company 
remained by far the largest single manufacturer out- 
side the combination. 

For two years defendant, International Har- 
vester Company, concealed and denied its association 
with D. M. Osborne & Co., and operated the latter 
as an independent company. This was in pursuance 
of defendant's policy, by disguising ownership, to use 
controlled companies to break down competition and 
secure for themselves the benefit of public sentiment 
against combinations. 

The plant is now operated as a branch of the Inter- 
national Harvester Company. 

Among the assets of D. M. Osborne & Co., defend- 
ants acquired the plant and business of the Colum- 
bian Cordage Company long engaged in manufactur- 
ing binding twine and selling the same throughout the 
United States. 

In the early part of 1903, in pursuance of their 
general purpose, defendants, through the Inter- 
national Harvester Company, acquired control of the 
Aultman Miller Company, engaged at Akron, Ohio, 
in interstate commerce in harvesters, mowers, and 
twine, selling and distributing its products through 
the United States. By agreement of the defendants 



27 

and the parties interested, a new company, the Ault- 
man Miller Buckeye Company, an Ohio corporation, 
was organized, which took over the plants and business 
as a going concern of the Aultman Miller Co. This 
company, by agreement with defendants, for a long 
time concealed and denied association with them and 
advertised itself as independent and was used by 
defendants as an instrument to cripple opponents, 
with the view of driving them out of business and of 
destroying competition. In 1906 the International 
Harvester Company acquired from the Aultman Miller 
Buckeye Company all its business, paying therefor 
cash. Defendants long since abandoned the manu- 
facture of harvesting machinery at the plant at Akron, 
Ohio, which was closed. Thereafter the International 
Harvester Company entered upon the manufacture 
of new lines at that plant, namely, autobuggies and 
tractors. The making of the " Buckeye " mowers 
and harvesting machinery formerly made by the 
Aultman Miller Company was discontinued. 

In the early part of 1903, in pursuance of their 
general purpose, defendants, through the Interna- 
tional Harvester Company acquired, by purchase of 
the Grass Twine Company, control of the stock and 
business of the Minnie Harvester Company, successor 
of the Minneapolis Harvester Company, long engaged 
at St. Paul, Minn., in the manufacture of harvesters 
and twine, selling and distributing its products in 
interstate commerce throughout the United States. 
Thereafter by agreement of the defendants, the Minnie 
Harvester Company for a long time concealed and de- 



28 

nied association with them and advertised itself as in- 
dependent, in pursuance of the policy of defendants, 
by disguising ownership to use controlled companies to 
break down opposition and secure for themselves the 
benefit of the sentiment against combinations. In the 
latter part of 1905 the International Harvester Com- 
pany acquired, by conveyance, the business as going 
concerns of the companies named above, and there- 
upon the plant of the Minnie company was dismantled 
as a manufactory of binders and mowers and subse- 
quently converted into a manufactory of twine; 
defendants discontinued the manufacture and sale of 
the "Minnie" binders and mowers. 

In the early part of 1903, in pursuance of the gen- 
eral purpose of defendants, the International Har- 
vester Company, acquired control of the Keystone 
Company, an Illinois corporation with a plant at 
Sterling, 111., long engaged in the manufacture and 
sale of harvesting machinery, and particularly hay 
tools and mowers, shipping and distributing these 
articles throughout the United States. At that 
time by agreement of defendants certain officers of the 
International Harvester Company purchased for cash 
all but a few shares of the stock of the Keystone Com- 
pany and thereafter operated that company as an in- 
dependent company, falsely advertising and holding 
it out to be independent of any trust or combine, in 
order that by disguising ownership defendants might 
use it as an instrument to cripple opponents, with the 
view of driving them out of business and of destroying 
competition. 



29 

In September, 1905, the International Harvester 
Company acquired, by conveyance from the Keystone 
Company, all the business of the latter as a going con- 
cern. The plant of the Keystone Company was at 
once abandoned and dismantled as a manufactory of 
hay tools and mowers. It was subsequently utilized 
for. the manufacture of tillage implements and new 
lines. The making of the " Keystone" binders and 
mowers was discontinued by defendants. 

In November, 1904, in pursuance of the general 
purposes above stated and more particularly in order 
to extend the control of defendants into other lines 
of agricultural implements, defendant, International 
Harvester Company, acquired for cash and notes, 
four-fifths of the capital stock of the Weber Wagon 
Company and an option on the balance, which was 
exercised August, 1905, long engaged at Auburn 
Park, 111., in manufacturing wagons, particularly for 
use on farms, and in selling and distributing them 
throughout the United States. By subsequent con- 
veyance said defendant acquired all the plant and 
business as a going concern of the Weber Wagon 
Company, and the plant is now operated as a branch 
of the International Harvester Company. 

In November, 1906, defendant, International Har- 
vester Company, in pursuance of the general purposes 
of defendants and in order to expand into other 
lines and ultimately secure control therein, acquired 
from the Kemp Company, for a long time engaged 
at Newark Valley, N. Y., and Waterloo, Iowa, in 
manufacturing manure spreaders and in selling and 



30 

distributing them throughout the United States all 
its business of manufacturing and selling manure 
spreaders together with all property used in the same, 
paying therefor cash and notes. The Waterloo plant 
was long since closed and abandoned; the Newark 
Valley works are now operated as a branch of the 
International Harvester Company for the manu- 
facture of manure spreaders. 

With the same purpose of expanding into allied 
lines of agricultural implements and acquiring con- 
trol thereof, defendant, International Harvester Com- 
pany, in 1906 bought from the Bettendorf Axle 
Company, long engaged in manufacturing wagons 
and in selling and shipping the same throughout the 
United States, all the patents of the Bettendorf Axle 
Company, paying therefor in cash. 

In January, 1907, after an amendment of the arti- 
cles of incorporation, the capital stock of the Inter- 
national Harvester Company was divided into two 
classes, $60,000,000 cumulative 7 per cent preferred 
and $60,000,000 common. In 1910 the issued cap- 
ital stock was increased to $140,000,000 by the dec- 
laration of a stock dividend of $20,000,000 on the 
common stock, this being a dividend of 33J per 
cent. 

VII. 

Prior to August, 1902, the five concerns which com- 
bined in the formation of the International Harvester 
Company, as hereinbefore described, and the other 
companies thereafter acquired by defendants, were 



31 

buying their necessary raw materials, iron, steel, 
lumber, etc., in interstate commerce in competition 
with each other. Thereafter all such necessary raw 
materials were purchased by a single organization in 
different places in the United States and then shipped 
to the several plants or works of the International 
Harvester Company, located as hereinafter described. 

In 1905, in pursuance of their general purpose, de- 
fendants, through the International Harvester Com- 
pany, organized the Wisconsin Steel Company, a Wis- 
consin corporation, with capital stock of $1,000,000, 
all of which is owned by the International Har- 
vester Company. This company preserves a sepa- 
rate organization, but its directors have at all times 
been elected by defendants, and its policy is con- 
trolled and directed by them. It operates under 
leases iron ore lands in Wisconsin, Minnesota, and 
Michigan, owns and operates coal lands and mines in 
Kentucky, blast furnaces for the production of pig 
iron at South Chicago, 111., and steel mills and rolling 
mills at South Chicago and Chicago, where it produces 
ingots, billets, blooms, finished bars and shapes. It 
is engaged in interstate commerce, selling its products 
above mentioned to defendants and others and ship- 
ping the same from the places of production to the 
plants and works of defendants hereinafter enumer- 
ated under paragraph IX. 

In 1905, in pursuance of their general purposes, 
defendants, through the International Harvester 
Company, organized the Wisconsin Lumber Company, 
a Wisconsin corporation, capital stock $250,000, all 



32 

of which is held by the International Harvester Com- 
pany. This company preserves a separate organiza- 
tion, but its directors have at all times been elected by 
defendants, and its policy is controlled and directed 
by them. It owns timberlands and sawmills in Mis- 
souri and Mississippi. It is engaged in interstate 
commerce, selling lumber and the products thereof to 
defendants and shipping the same from Missouri and 
Mississippi to the plants and works of defendants 
hereinafter enumerated under paragraph IX. 

The defendants, Wisconsin Steel Company and 
Wisconsin Lumber Company, are used by defendants 
as means and instrumentalities to eliminate competi- 
tion and in pursuance of the general purposes herein 
above described. 

In pursuance of their general purposes, defendants, 
in 1902, through the International Harvester Com- 
pany, acquired all the capital stock, $500,000, of the 
Illinois Northern Railway, an Illinois corporation. 
The Illinois Railway is a switching company, organ- 
ized in 1901 by the McCormick Harvesting Machine 
Company, owning or leasing some twenty-five miles 
of trackage, upon which are situated the plants of 
the International Harvester Company and other 
industries at Chicago. Its capital stock passed with 
the assets of that company to the International 
Harvester Company. The capital stock of the rail- 
way company is held for the benefit of the Interna- 
tional Harvester Company, which company elects 
the officers and directors of the railway and controls 
and directs its policy. The defendants, through the 



33 

International Harvester Company, in 1904 and at 
other times, used the Illinois Northern Railway as a 
means to obtain undue preferences from railroads 
connecting with the Illinois Northern Railway, among 
other ways, by persuading and inducing such con- 
necting railroads to allow to the Illinois Northern 
Railway excessive divisions of through rates on 
traffic, principally harvesting machinery, from the 
factories of the International Harvester Company at 
Chicago, which was transported by the switching 
company, the Illinois Northern Railway, and trans- 
ferred by it to the said connecting roads, which 
thereupon allowed the Illinois Northern Railway such 
excessive divisions of the through rates. 

In pursuance of their general purposes, defendants, 
in 1903, through the International Harvester Com- 
pany, acquired all the capital stock, $400,000, of the 
Chicago, West Pullman & Southern Railroad Com- 
pany, an Illinois corporation. This railroad company 
is a switching company operating some twenty-four 
miles of tracks, owned or leased, upon which are 
situated plants and works of the Wisconsin Steel 
Company and the International Harvester Company 
at West Pullman, Illinois, and other industries. The 
capital stock of the railroad company is held for the 
benefit of the International Harvester Company, 
which company elects the officers and directors of the 
railway and controls and directs its policy. The 
defendants, through the International Harvester 
Company, in 1904 and at other times, used the 
Chicago, West Pullman & Southern Railroad Com- 



34 

pany as a means to obtain undue preferences from 
railroads connecting with the Chicago, West Pullman 
& Southern Railroad Company, among other wa}^s, by 
persuading and inducing such connecting railroads to 
allow to the Chicago, West Pullman & Southern 
Railroad Company excessive divisions of through 
rates on traffic from plants of the International 
Harvester Company and the Wisconsin Steel Com- 
pany, which was transported by the switching com- 
pany, the Chicago, West Pullman & Southern Rail- 
road Company, and delivered by it to the said con- 
necting railroads, which thereupon allowed the 
switching company such excessive divisions of the 
through rates. 

In August, 1905, defendants, in pursuance of their 
general purpose, through the International Harvester 
Company, organized defendant, the International 
Flax Twine Company, a Minnesota corporation, 
capital stock $250,000, and thereafter, by means of 
said Minnesota corporation, engaged in a further 
extension of the business of the defendants of manu- 
facturing and selling binder twine. To it was con- 
veyed the plant of the Grass Twine Company at 
St. Paul, purchased by the defendants in the man- 
ner hereinbefore described. All the products of 
defendant, International Flax Twine Company, are 
sold by it to defendant, the International Harvester 
Company of America, which then sells them through- 
out the United States in the same manner that it 
sells and distributes the products of the International 
Harvester Company. Defendant, International Flax 



35 

Twine Company, is being used by defendants as an 
instrumentality in accomplishing the unlawful pur- 
poses of monopolization previously described. 

VIII. 

PROFITS. 

The following tables show the amounts which have been paid as divi- 
dends on the stocks of International Company in the respective years 
mentioned and the amounts of surplus income realized and other financial 
results of its operations. 

1903. 

Stock outstanding $120, 000, 000. 00 

Dividends, 3 per cent 3, 600, 000. 00 

Surplus 2,041,180.61 

1904. 

Stock outstanding $120, 000, 000. 00 

Dividends, 4 per cent 4, 800, 000. 00 

Net surplus from year's earnings after deducting dividends 

and expenses 858, 534. 68 

Total accumulated surplus 2, 899, 715. 29 

1905. 

Stock outstanding $120, 000, 000. 00 

Dividends, 4 per cent 4, 800, 000. 00 

Net surplus from year's earnings after deducting dividends 

and expenses 2, 679, 187. 36 

Total accumulated surplus 5, 578, 902. 65 

Total sales for the year 55, 687, 978. 27 

1906. 

Stock outstanding $120, 000, 000. 00 

Dividends 4, 800, 000. 00 

Net surplus from year's earnings after deducting dividends 

and expenses 3, 046, 947. 32 

Total accumulated surplus (after deducting $500,000 as a 

special reserve) 8, 125, 849. 97 

Total sales for the year 67, 589, 056. 27 

1907. 

Preferred stock outstanding $60, 000, 000. 00 

Common stock outstanding 60, 000, 000. 00 

Dividends on preferred stock, 7 per cent 4, 200, 000. 00 

Net surplus from year's earnings after deducting dividends 

and expenses 3, 880, 457. 51 

Total accumulated surplus 12, 006, 307. 48 

Total assets 156, 282, 454. 16 

Total sales for the year 78, 206, 890. 36 



36 

1908. 

Preferred stock outstanding $60, 000, 000. 00 

Common stock outstanding 60, 000, 000. 00 

Dividends on preferred stock, 7 per cent 4, 200, 000. 00 

Net surplus from year's earnings after deducting dividends 

and expenses 4, 685, 682. 13 

Total accumulated surplus 16, 691, 989. 61 

Total assets 157, 608, 632. 51 

Total sales for the year „ . . . 72, 541, 771. 16 

1909. 

Preferred stock outstanding $60, 000, 000. 00 

Common stock outstanding 60, 000, 000. 00 

Dividends on preferred stock, 7 per cent 4, 200, 000. 00 

Dividend on common stock issued as a stock dividend, 

33 J per cent 20, 000, 000. 00 

Net surplus from year's earnings after deducting preferred 

dividends and expenses 10, 692, 740. 21 

Total accumulated surplus before distribution of dividend 

on common stock 27, 384, 729. 82 

Total accumulated surplus after distribution of dividend 

on common stock 7, 384, 729. 82 

Total assets 172, 795, 542. 61 

Total sales for the year 86, 614, 549. 55 

1910. 

Preferred stock outstanding $60, 000, 000. 00 

Common stock outstanding 80, 000, 000. 00 

Dividends on preferred stock, 7 per cent 4, 200, 000. 00 

Dividends on common stock, 4 per cent 3, 200, 000. 00 

Net surplus from year's earnings after deducting dividends 

and expenses 8, 684, 819. 19 

Total accumulated surplus 16, 069, 549. 01 

Total assets , 195, 306, 083. 53 

Total sales for the year 101, 166, 358. 88 

IX. 

As previously stated, on the organization of the 
International Harvester Company in 1902 all assets, 
rights, and property belonging to the five concerns 
above enumerated came into the possession and 
ownership of the new company and since that time 
the International Harvester Company has carried 
on the business of all in that name. 



37 

It now operates as branches the following plants 
manufacturing harvesting and agricultural machinery, 
tools and implements, and binder twine. Prior to 
acquisition by the International Harvester Company 
every plant other than the Tractor works was operated 
by a separate company, which was in competition 
with all the others: 

Akron works, Akron, Ohio : This plant was acquired 
from the Aultman Miller Company, which was 
manufacturing the " Buckeye" machines, harvesters, 
mowers, and reapers. The making of those machines 
has been discontinued. Defendants now manufac- 
ture at this plant a new line, auto wagons and com- 
mercial cars, for which the plant has an annual 
capacity of 4,000. 

Champion works, Springfield, Ohio : Acquired from 
Warder, Bushnell & Glessner Company. Defend- 
ants manufacture at this plant harvesting machines 
and .the following new lines: Seeding machines, 
hay presses, and hay tools, manure spreaders. 
Annual capacity, 85,000 machines. 

Deering works, Chicago, 111.: Acquired from the 
Deering Company. Output: Binders, reapers, mow- 
ers, rakes, headers, strippers, drills, corn machines, 
and binder twine, many of which are new lines. 
Annual capacity, 300,000 machines, 31,000 tons 
twine. 

Keystone works, Sterling, 111.: Acquired from the 
Keystone Company, which was manufacturing har- 
vesting machines, tillage implements, hay tools, and 
twine. Defendants have discontinued making "Key- 



38 

stone " machines and now manufacture at this plant 
harrows, corn shellers, hay loaders, and side-delivery 
rakes, many of which are new lines. Annual capac- 
ity, 92,500 machines. 

McCormick works, Chicago, 111.: Acquired from 
the McCormick Harvesting Machine Company. Out- 
put: Binders, headers, reapers, mowers, rakes, corn 
machines, and twine. Annual capacity, 375,000 
machines, 33,000 tons twine. 

Milwaukee works, Milwaukee, Wis.: Acquired from 
the Milwaukee Harvester Company, which was manu- 
facturing harvesting machines. Defendants now 
make the " Milwaukee" machines at the McCormick 
works and manufacture these new lines at Milwaukee, 
gasoline and alcohol engines, cream separators, and 
tractors. Annual capacity, 75,000. 

Newark Valley works, Newark Valley, N. Y.: 
Acquired from the Kemp Company. Output : Manure 
spreaders. Annual capacity, 7,000. 

Osborne works, Auburn, New York: Acquired 
from D. M. Osborne & Co., which was manufacturing 
harvesting machines. Output: Binders, reapers, 
mowers, corn harvesters, rakes, tedders, harrows, 
cultivators, tillage implements, and twine, many of 
which are new lines. Annual capacity, 275,000 
machines, 15,000 tons twine. 

Piano works, West Pullman, 111.: Acquired from 
the Piano Manufacturing Company, which was 
manufacturing harvesting machines. Defendants 
now make the " Piano " machines at the Deering works 



39 

and manufacture at this plant new lines, manure 
spreaders and wagons. Annual capacity, 60,000. 

St. Paul works, St. Paul, Minn.: Acquired from 
the Grass Twine Company and now owned by the 

defendant, International Flax Twine Company. An- 
nual capacity, 4,000 tons flax twine. 

Tractor works, Chicago, 111.: A new plant built 
by the defendant International Harvester Company 
for the manufacture of tractors. Annual capacity, 
1,500. 

Weber works, Auburn Park, 111.: Acquired from 
the Weber Wagon Company. Output : Wagons. An- 
nual capacity, 40,000. 

The International Harvester Company of America, 
the sales department of the International Harvester 
Company (as described above, pp. 23-25), has more 
than 90 general agencies and distributing centers 
in the United States and many in Canada. The 
products of the plants above enumerated are shipped 
by the International Harvester Company to these 
general agencies of the International Harvester Com- 
pany of America scattered throughout the United 
States, and then are sold and shipped over the ordi- 
nary freight routes and distributed and delivered 
to every part of the Union as a part of interstate 
commerce. 

Through the means hereinbefore described defend- 
ants control and utilize thousands of retail imple- 
ment dealers throughout the different States. 

In the beginning the only business of the Inter- 
national Harvester Company was the manufacture 



40 

and sale of grain harvesters or binders, and mowers, 
reapers, rakes, and twine, and corn harvesters, corn 
huskers, shredders and shockers, the principal lines 
being grain binders, mowers and rakes — the same as 
that carried on by the companies whose plants, busi- 
ness, and assets it acquired upon its formation; but 
from year to year many other agricultural machines, 
implements, and tools have been added, so that to-day 
it is manufacturing and selling all classes — tillage 
implements, seeding implements, harvesting machines, 
threshing machinery, and wagons, manure spreaders, 
gasoline engines, cream separators, autobuggies, 
automobiles, tractors, cultivators, drills, tedders, 
seeders, hay loaders, hay presses, sweep rakes, stack- 
ers, trucks, etc., all in pursuance of the unlawful 
purpose to monopolize trade hereinbefore described. 
At least 90 per cent of the harvesters or grain binders 
and 75 per cent of the mowers and over 50 per cent of 
the binder twine annually produced and sold in the 
United States are the product of the International 
Harvester Company and are sold through the Inter- 
national Harvester Company of America as herein 
described. There are only three or four manufacturers 
of harvesting machinery in the United States other 
than the International Harvester Company. These, 
in comparison with it, are small, and as their business 
does not embrace the entire United States, in many 
sections of the country the International Harvester 
Company has a complete monopoly of harvesting 
machinery. In other lines of agricultural imple- 
ments the percentage controlled by it is less, but the 



41 

varieties and relative quantities of these have in- 
creased rapidly, so that, considering agricultural im- 
plements of every kind, other than harvesting lines, 
its output amounts to over 30 per cent of the whole. 

Through the power acquired by defendants by 
their monopolization of the manufacture and sale of 
harvesting machinery, defendants have been enabled 
to advance and have advanced the prices of harvest- 
ing implements in interstate commerce, to the grave 
injury of the farmer and the general public 

The opportunities for any new competitors are 
constantly being closed by defendants in all lines of 
agricultural implements ; the agencies for distribution, 
the retail implement dealers, and others are rapidly 
coming under their undisputed control, and unless 
prevented and restrained, their complete unchallenged 
dominion of every branch of trade and commerce in 
agricultural implements of all kinds may be confi- 
dently expected at an early date. 

X. 

Petitioner avers that the combination and con- 
spiracy to restrain the interstate trade and com- 
merce in harvesting and agricultural machinery, 
tools, and implements still exists; that the defend- 
ants are carrying out the same within the State and 
district of Minnesota, and that many of the things 
herein complained of have been committed in whole 
and others in part within said State and district, and 
are now being committed therein; that the defend- 
ant, International Flax Twine Company, is located 
and doing business within said State and district. 



42 
PRAYER. 

Wherefore petitioner prays: 

I. That the combination hereinbefore described, 
in and of itself, as well as each and all of the ele- 
ments composing it, whether corporate or individual, 
whether considered collectively or separately, be 
decreed to be in restraint of interstate trade and an 
attempt to monopolize and a monopolization thereof 
within the first and second sections of the act of 
Congress of July 2, 1890, entitled " An act to protect 
trade and commerce against unlawful restraints and 
monopolies.' ' 

II. That the court adjudge the International 
Harvester Company to be a combination in restraint 
of interstate trade and commerce in harvesting and 
agricultural machinery, a restraint, and an attempt 
to monopolize and a monopolization thereof; that 
the court direct a dissolution of said combination. 

III. That the International Harvester Company of 
America be adjudged an unlawful instrumentality 
operated and maintained by defendants solely for the 
purpose of carrying into effect the illegal purposes of 
said contracts, combinations, and conspiracies in 
restraint of interstate trade and commerce and of 
said attempts to monopolize, and monopolies; and 
that it be decreed to be in restraint of trade and 
commerce among the States and an attempt to 
monopolize and a monopolization thereof. 

IV. That the court by way of an injunction restrain 
the movement of the products of the International 



43 

Harvester Company and of the International Har- 
vester Company of America in the channels of inter- 
state commerce, or, if the court should be of 
opinion that the public interests will be better sub- 
served thereby, that receivers be appointed to take 
possession of all the property, assets, business, and 
affairs of said combinations, and wind up the same, 
and otherwise take such course in regard thereto as 
will bring about conditions in trade and commerce 
among the States in harmony with the law. 

V. That the holding of stock by the International 
Harvester Company in the other corporation de- 
fendants under the circumstances shown be declared 
illegal and that it be enjoined from continuing 
to hold or own such shares and from exercising 
any right in connection therewith. 

VI. That the defendants, each and all, be en- 
joined from continuing to carry out the purposes 
of the above-described contracts, combinations, con- 
spiracies, and attempts to monopolize and monopo- 
lizations by the means herein described, or by any 
other, and be required to desist and withdraw from 
all connection with the same. 

That petitioner have such other, further, and 
general relief as may be proper. 

To the end, therefore, that the United States of 
America may obtain the relief to which it is justly 
entitled in the premises, may it please your honors to 
grant unto it writs of subpoena directed to the said 
defendants: International Harvester Co., Interna- 



44 

tional Harvester Co. of America, International Flax 
Twine Co., the Wisconsin Steel Co., the Wis- 
consin Lumber Co., Illinois Northern Railway, the 
Chicago, West Pullman & Southern Railroad Co., 
Cyrus H. McCormick, Charles Deering, James Deer- 
ing, John J. Glessner, William H. Jones, Harold F. 
McCormick, Richard F. Howe, Edgar A. Bancroft, 
George F. Baker, William J. Louderback, Norman 
B. Ream, Charles Steele, John A. Chapman, Elbert 
H. Gary, Thomas D. Jones, John P. Wilson, William 
L. Saunders, George W. Perkins, and each and every 
one of them, commanding them and each of them 
to appear herein and answer, but not under oath 
(answer under oath being hereby expressly waived), 
the allegations contained in the foregoing petition 
and abide by and perform such orders and decree 
as the court may make in the premises. 

Charles C. Houpt, 
United States Attorney. 

George W. Wickersham, 

Attorney General. 

James A. Fowler, 

Assistant to the Attorney General. 

Edwin P. Grosvenor, 

Special Assistant to the Attorney General. 



EXHIBIT 1. 

An agreement, made and entered into this 28th day of 
July, 1902, by and between the McCormick Harvesting 
Machine Co. (hereinafter called the " Vendor"), party of 
the first part, and William C. Lane (hereinafter called the 
11 Purchaser"), party of the second part. 

Whereas the Vendor is a corporation duly organized and 
existing under the laws of the State of Illinois and owns 
certain manufacturing properties located at Chicago, 111., 
and employed in the manufacture of harvesting machinery 
and other properties intended for use in connection there- 
with; and 

Whereas the purchaser desires to acquire said properties 
and intends, upon the acquisition of said properties, to sell, 
convey, and transfer the same to a corporation now existing 
or hereafter to be organized under the laws of the State of 
Illinois, or other State (hereinafter called the "Purchasing 
Company"), with capital stock as hereinafter provided: 

Now, this agreement witnesseth that the parties hereto 
have agreed and covenanted as follows : 

First. The Vendor agrees, for the considerations and upon 
the terms hereinafter stated, to sell, assign, transfer, convey, 
and deliver unto the Purchaser, his nominee or assign, by 
good and indefeasible title, free and clear of incumbrances, 
indebtedness, and liabilities, except as herein stated, and the 
Purchaser agrees to purchase, all and singular the real estate, 
factories, plants, buildings, improvements, machinery, pat- 
terns, tools, apparatus, fixtures, and appliances of the Ven- 
dor, and all the patents, inventions, devices, patent rights, 
licenses, trade-marks, trade names, and good will of all and 
singular said property as a going concern, and also all of the 
products manufactured and in process of manufacture, mate- 
rials, supplies, and merchandise on hand at the time of closing 
said sale, and all and singular its then pending contract for 
the purchase of property or materials or the sale of product; 
also all interest in fiber lands, as well as all other property 

(45) 



46 

of the Vendor appertaining to the Vendor's business afore- 
said. There shall also be sold and- purchased with said 
properties $20,000,000 (at face value and accrued interest) 
of bills and accounts receivable, representing the sales made 
by the Vendor. Such bills and accounts receivable are to 
mature prior to March 1, 1905, and are to be guaranteed as 
hereinafter provided. Cash may be substituted for the 
whole or any part of such accounts and bills receivable, at 
the option of the Vendor. 

Second. The Vendor agrees that, as soon as practicable 
after the execution of this instrument, it will, in pursuance 
of due authority to be conferred by the vote or consent of 
all its stockholders, duly execute and acknowledge, and 
cause to be forthwith deposited with J. P. Morgan & Co., or 
a trust company designated by them, as depositary, proper 
deeds and other instruments of conveyance and sale for the 
granting, conveying, and transferring, as aforesaid, unto the 
Purchaser and its assigns, all the property hereinbefore 
recited, together with evidence of the vote or consent of the 
stockholders of the Vendor, as aforesaid. Such depositary 
shall hold the said deeds and other instruments in escrow 
and deliver the same to the Purchaser, or upon his order, 
only upon receiving for account of the Vendor the consider- 
ation hereinafter provided, and upon the performance by 
the Purchaser of the provisions hereof. 

Third. The Vendor agrees to deliver to said depository, 
as soon as practicable, full statements in respect of its prop- 
erty and its assets and liabilities, its contracts for the pur- 
chase of materials and other property and for the sale of its 
manufactured products, and otherwise, relating to its prop- 
erty and business. The Vendor agrees that pending the 
performance of and while this contract is in force it will not, 
without the written consent of the Purchaser, or of said 
Purchasing Company, * enter into any new contracts or 
assume any new obligations or make any purchases or sales 
such as are necessary and customary in the ordinary con- 
duct of its regular business or to maintain it as a going con- 
cern and except such as may be necessary for the perform- 
ance of agreements already entered into ; nor make payments 
in advance of their maturity on pending contracts. The 
Vendor further agrees that during and while this contract 
is in force no increase shall be made in its capital stock or in 



47 

the capital employed in its business, and no bonds issued, 
and that no mortgage, lease, or conveyance shall be made 
upon or in respect of its real estate or plant without the 
written consent of the Purchaser; and also, that in case of 
any difference of opinion between the Vendor and the Pur- 
chaser in relation to the conduct of the business of the 
Vendor, such difference shall be decided by J. P. Morgan or 
George W. Perkins, whose decision shall be final. All serv- 
ice contracts of the Vendor taken over by the Purchasing 
Company shall be terminable on 60 days' notice, unless 
specific cases otherwise determined by said Purchasing 
Company; and the Vendor shall indemnify the Purchasing 
Company against any claim under profit-sharing contracts. 
In the case of any property delivered to the Purchaser by 
the Vendor, which is subject to incumbrance, the amount of 
the incumbrance shall be deducted in determining the value 
thereof. 

Fourth. The Purchaser and said Purchasing Company, and 
his or its nominees, the appraisers, accountants, and counsel, 
shall have the right to examine the deeds and other instru- 
ments of conveyance and transfer so to be deposited by the 
Vendor with the depositary, as aforesaid, and shall, if the 
Purchaser shall so require, be furnished with abstracts of 
title, title deeds, and surveys which may facilitate the exami- 
nation of the title to the property to be conveyed or trans- 
ferred, and shall have free access to all the deeds, contracts, 
books, and records of the Vendor for the purpose of examining 
and verifying the statements made with respect to its prop- 
erty, business assets, liabilities, and corporate status. 

Fifth. The purchase price to be paid by the Purchaser to 
the Vendor for all and singular said property, shall be the 
aggregate of the several appraisals and valuations herein- 
after provided for, and of said accounts and bills receivable 
and cash, if any, and shall be payable in full paid and non- 
assessable shares of the capital stock of said Purchasing Com- 
pany taken at par. 

In order to make such appraisals and fix and determine 
such valuations, the property of the Vendor shall be classi- 
fied as follows : 

(1) Real estate, buildings, factories, warehouses, fixtures, 
machinery, tools, patterns, drawings, molds, and all other 



48 

personal property used in connection with or appertaining 
to the Vendor's business and which is not intended for sales 
in the ordinary course of business or to form part of or to be 
consumed in the manufacture of the Vendor's products, and 
including pending contracts for purchase of real property and 
for construction of buildings or fixtures, but not including 
the property and contracts otherwise classified. The assets 
of this class are hereinafter collectively designated as " Plant." 

(2) All materials on hand, manufactured, unmanufactured, 
or in process of manufacture, including any and all articles 
intended to form part of or to be used in manufacturing the 
Vendor's product. The assets of this class are hereinafter 
collectively designated as "Materials on hand." 

(3) Unexecuted contracts or orders for the sale of the 
Vendor's manufactured products, but not including con- 
tracts or orders for deliveries after the year 1902, for which 
latter contracts and orders (although to be transferred) no 
allowance shall be made. No allowance shall be made for 
contracts or orders for delivery prior to January 1, 1903, 
unless the material necessary for the completion of the ma- 
chines or other manufactured products shall be in the pos- 
session of the Vendor and upon its plant at the time of the 
appraisal. Such contracts are hereinafter collectively desig- 
nated as "Pending sales." 

(4) All contracts heretofore entered into by the Vendor 
for the purchase of material to be used in the manufacture 
of its products. Such contracts are hereinafter collectively 
designated as "Material contracts." 

(5) The railroad property and equipment belonging to 
the Vendor, including the lease which has been agreed upon 
with the Atchison, Topeka & Santa Fe Railroad Co., such 
property being hereinafter designated as the "McCormick 
Railroad." 

(6) Patents, patent rights, devices, inventions, licenses, 
trade-marks, trade names and good will, including the value 
of the established business, name, standing in the trade, 
stability of business, organization, trade or custom as a going 
concern. Such assets are hereinafter collectively designated 
as "Patents, good will, etc." 

The value of the plant, as above defined, shall be ascer- 
tained and determined by three appraisers, who shall fix the 



49 

present value of such plant as a going concern. One of such 
appraisers shall be nominated and appointed by the Vendor 
and the other two by J. P. Morgan & Co. 

The present value to a going concern of said materials on 
hand, of the said pending sales, tnd of the said materials 
contracts, as above defined, shall similarly be determined 
by three appraisers, one to be nominated and appointed by 
the Vendor and two by J. P. Morgan & Co. Such appraisers 
shall make allowance in their judgment for unprofitable con- 
tracts. 

The value of the McCormick Railroad to a going concern, 
as above defined, shall be determined by J. P. Morgan or 
George W. Perkins. 

The value of the patents and good will shall, for the pur- 
poses of this contract, be a sum equal to the net profits of 
the Vendor during the two years ending November 30, 1902, 
as ascertained in the manner hereinafter provided, plus 10 
per cent thereof; and to such amount shall be added the 
value of the name, standing in the trade, stability of business, 
organization, trade, custom, etc., of the Vendor as a going 
concern, which value shall be fixed by J. P. Morgan or George 
W. Perkins in his sole discretion. 

The profits of said two years shall be ascertained and 
reported to J. P. Morgan & Co. by three accountants, one 
of whom shall be nominated by the Vendor and the other 
two by J. P. Morgan & Co. In calculating the net profits 
of the business there shall be excluded all allowance for inter- 
est on bills and accounts receivable, as well as the cost of 
collecting bills and accounts receivable, and all interest paid 
or payable on moneys used by the Vendor and belonging to 
the trustees of Mary V. McCormick or Cyrus H. McCormick, 
Harold F. McCormick, or Stanley McCormick and interest 
on the sum of $1,000,000 borrowed by the Vendor on the 
security of property belonging to the Messrs. McCormick 
individually. Said accountants in calculating the net profits 
for said two years shall make allowance for depreciation or 
loss, if any, on bills and accounts receivable, for depreciation 
or loss, if any, of materials on hand, or for depreciation, if 
any, of the said plant from wear and tear or otherwise. In 
each case hereinbefore enumerated the decision, appraisal, 
or report of a majority of the appraisers or accountants or 



50 

the decision of J. P. Morgan or George W. Perkins (if sole 
arbitrator or appraiser), as the case may be, shall be binding 
and conclusive upon the parties hereto. 

Sixth. Payment of the amount of all contracts or orders 
for sales of manufactured products included as assets of the 
Vendor as aforesaid and transferred under this contract, 
shall be guaranteed to the satisfaction of J. P. Morgan & Co. 
by the Vendor, and the net value thereof shall be appraised 
on that basis. Any and all accounts and bills receivable 
transferred by the Vendor hereunder shall be taken as their 
face value and accrued interest to date of transfer; but the 
Vendor shall guarantee and hereby does guarantee that the 
Purchaser or Purchasing Company shall realize thereon such 
face value and interest accrued and to accrue and that said 
principal and interest shall all be received on or prior to the 
1st day of March, 1905. The collections shall be made by 
the Purchasing Company, but the expenses of collection shall 
be borne by the Vendor. Pending such collections, the 
Vendor agrees to advance and pay to the Purchasing Com- 
pany on. demand, from time to time, on account of such guar- 
anty such amounts as the board of directors of the Purchasing 
Company may determine or convenient for the conduct of its 
business, but not in excess of such amounts as J. P. Morgan 
& Co. may from time to time approve. If such advance pay- 
ments be made by the Vendor, then the Purchasing Company 
shall transfer to the Vendor or its nominees an equal amount 
in principal and accrued interest of uncollected accounts or 
bills receivable of the earliest maturities. The Purchasing 
Company may take such measures as to it may seem wise, for 
the collection of the accounts and bills receivable and grant 
extensions and indulgences to debtors by whom the same are 
payable without release of or prejudice to such guaranty or 
extension or change of the obligation of the Vendor to make 
payments as aforesaid. The Purchasing Company shall from 
time to time, on demand, furnish the Vendor a full statement 
showing which accounts and bills receivable remain unpaid, 
and what, if any, disposition has been made in regard thereto 
or steps taken to enforce the collection thereof. 

The Vendor shall secure the guaranties in this article pro- 
vided for, by collateral or otherwise, to the satisfaction of 
J. P. Morgan & Co. in their discretion. 



51 

Seventh. The Purchasing Company shall have such cor- 
porate title, capital stock, organization by-laws, directors, 
and committees as may be approved by J. P. Morgan & Co., 
and shall have, in addition to materials on hand and inven- 
tories, a working capital of $60,000,000 to be represented by 
cash or bills and accounts receivable guaranteed as aforesaid. 

Eighth. The amount and the classes (if there be more than 
one class) of the capital stock of the Purchasing Company 
shall be determined after the ascertainment of the aggregate 
value of all its assets and properties; but such amount and 
such classes shall severally be satisfactory to J. P. Morgan & 
Co. If, however, there be only one class of stock, the capital 
stock, the capital stock shall not exceed $120,000,000 par 
value, even though the aggregate value of the assets and 
properties of the Purchasing Company be in excess thereof. 
If there be both preferred stock and common stock, the pre- 
ferred stock shall not exceed $120,000,000 par value and shall 
entitle the holders to cumulate preferential dividends at the 
rate of but not to exceed 6 per cent per annum and accumu- 
lated dividends ; and the common stock shall not exceed the 
remaining value of the corporate assets and properties as so 
determined, which value may be ascertained and determined 
irrespective of the special appraisals which are to be made 
under this agreement. 

If there shall be two classes of stock, then and in that 
event the Vendor shall be entitled to receive as additional 
purchase price under this agreement common stock to an 
amount that shall bear to the total issue thereof the same 
proportion that the preferred stock to be received by the 
Vendor under this agreement shall bear to the total issue 
of the preferred stock. 

Ninth. The purchase provided for in this contract shall 
take effect as of such day in September, 1902, as shall be 
designated by the Purchaser with the approval of J. P. 
Morgan & Co.; the appraisals shall be made as of such dates 
as nearly as practicable, and the performance of the contract 
shall be completed prior to January 1, 1903. 

Tenth. The charter or certificate of incorporation or organ- 
ization of the Purchasing Company shall provide, among 
other things, that the capital stock of the corporation shall 
not be increased or diminished except upon the affirmative 



52 

vote or consent of the holders of at least two-thirds of each 
class of the outstanding capital stock of the company. 
Said charter or certificate may also provide that the stock- 
holders may enter into a voting trust of their stock for a 
limited period. The charter or certificate shall likewise 
provide that no mortgage or lien upon the real property, 
plants, tools, or machinery of the Purchasing Company shall 
be created without the affirmative vote or the consent of the 
holders of at least two-thirds of each class of the outstanding 
capital stock. 

Eleventh. The Vendor undertakes and agrees that it, or 
the holders of the stock of the Purchasing Company so to be 
issued in payment for the property to be transferred and con- 
veyed under this agreement, shall deposit their stock with 
J. P. Morgan & Co., or a trust company to be designated by 
them, as depositary, upon a voting trust, which shall pro- 
vide, among other things, for the appointment of three vot- 
ing trustees, one of whom shall be J. P. Morgan or George W. 
Perkins and the other two shall be persons appointed by J. P. 
Morgan & Co. The voting trust agreement shall be for the 
period of 10 years, with provision, however, that it may be 
terminated at any time after the expiration of 5 years upon 
90 days' notice, if a majority of the voting trustees shall so 
decide. The capital stock of the Purchasing Company shall 
be transferred to such voting trustees, who shall issue trans- 
ferable certificates of beneficial interest entitling the holder 
to any dividends, distribution of profits, and subscription 
rights which may accrue in respect of the stock so held by the 
voting trustees, and upon the termination of the voting trust 
entitling the holder to a proportionate amount of the stock so 
transferred to the voting trustees. The form, terms, and pro- 
visions of the voting trust agreement shall be subject to the 
approval of J. P. Morgan & Co. The voting trust agreement 
shall contain adequate restrictions upon the voting power of 
the voting trustees in respect of an increase or diminution of 
capital stock, or the creation of any mortgage as aforesaid, 
so that any vote or consent by the voting trustees for any 
such increase or diminution, or mortgage, shall be given only 
upon the affirmative vote or written consent of the owners of 
a corresponding amount of the voting trust certificates of 
interest outstanding. 



53 

The Vendor, or a majority of its stockholders, shall 
further agree with J. P. Morgan & Co. that during the 
first year after the issue of such stock or voting trust certifi- 
cates, the Vendor or its stockholders shall own, and shall 
refrain from selling or otherwise disposing of, at least 80 
per cent of the original holdings acquired under this agree- 
ment or otherwise; during the second year at least 60 per 
cent of such original holdings; during the third year at 
least 40 per cent of such original holdings; and thereafter 
and during the existence of the voting trust, at least one- 
third of such original holdings; provided, however, the 
Vendor (or its stockholders) may at any time after the 
expiration of the fourth year withdraw from the custody 
of J. P. Morgan & Co., and sell or otherwise dispose of, 
the remaining one-third of said original holdings, or any 
part thereof, but in such case any Voting Trustee represent- 
ing such holdings shall immediately resign as trustee if 
desired by the two remaining trustees. A successor shall 
thereupon be appointed by the other two trustees. 

As guarantee for the performance of the foregoing cove- 
nant not to sell or otherwise dispose of stock or voting 
trust certificates, the Vendor or its stockholders shall sever- 
ally pledge with J. P. Morgan & Co. an amount of stock 
or voting trust certificates equal to the proportion which 
they have agreed to continue to own, which stock shall 
be released and delivered to them or upon their orders, 
from time to time, as they may become entitled to sell; 
but, except as herein otherwise provided, one-third of the 
total original holdings as aforesaid shall remain pledged 
with J. P. Morgan & Co., during the existence of the voting 
trust. 

In case during the first year after the issue of said stock 
by the Purchasing Company the Vendor shall desire to sell 
any of the stock of voting trust certificates which it is free 
to sell under the provisions hereof, it shall offer the stock 
to J. P. Morgan & Co. by notice in writing, specifying the 
amount of the stock and the price at which the same is 
offered, and the Vendor shall be entitled to sell such stock 
to others only in case J. P. Morgan & Co. shall not within 
20 days thereafter purchase said stock at the price named 
in the notice or at a price satisfactory to the Vendor. 



54 

Twelfth. This contract, or any part thereof, may be 
transferred by the Purchaser to the Purchasing Company, 
and such Purchasing Company may thereupon enforce all 
and singular its terms and conditions as fully to all intents 
and purposes as if it were a party thereto. The place of 
performance of this contract shall be at the office of the 
Hudson Trust Co., Hoboken, N. J. 

Thirteenth. The individual holders of a majority of the 
capital stock of the Vendor shall jointly and severally 
guarantee the performance of this contract by the Vendor 
as well as the substantial performance of all and singular 
the covenants, agreements, and guaranties which may sur- 
vive the dissolution of the Vendor, should such dissolution 
be finally determined upon. 

The individual holders of all the capital stock of the Vendor 
shall, as soon as practicable, and before the final consumma- 
tion of this contract, cause to be deposited with J. P. Morgan 
& Co., or with a trust company to be designated by them, as 
depositary, certificates representing all the capital stock of 
the Vendor, duly indorsed for transfer in blank, and such 
depositary, upon the Vendor receiving said purchase price, 
shall deliver said certificates to the purchaser, his nominee or 
assign, but the original stockholders shall be entitled to all 
payments payable upon said stock as their distributive share 
of the purchase price hereunder, or of any other assets of the 
Vendor not herein undertaken to be conveyed or transferred. 

Fourteenth. The Purchaser undertakes to duly secure by 
contract the appointment of J. P. Morgan & Co. as the fiscal 
agents of the Purchasing Company and their acceptance of 
such appointment in order that the Purchasing Company 
may secure and have the benefit and advantage of the advice 
of said firm in the management of its financial affairs. 

If any dispute should arise under this contract as to its 
true intent or meaning, or in respect of the performance of 
any part thereof, whether between the parties hereto or 
between the Vendor and the Purchasing Company, the 
matter in dispute in each and every case shall be left to J. P. 
Morgan or George W. Perkins as sole arbitrator, and the 
decision of such arbitrator shall be binding and conclusive 
upon the parties. 



55 

Fifteenth. In case any appraiser, arbitrator, accountant, 
or voting trustee shall for any reason fail or cease to serve, 
then and in said event another or a successor shall be nomi- 
nated and appointed in his place by the Vendor or by J. P. 
Morgan & Co., respectively, as the case may be, subject, 
however, in the case of voting trustees, to the provisions of 
the voting trust agreement. 

Reference in this agreement to J. P. Morgan & Co. shall 
apply to that firm as now or hereafter constituted. 

In witness whereof the party of the first part has caused 
these presents to be executed in its corporate name by its 
president and its corporate seal to be hereunto affixed, 
attested by its secretary, and the party of the second part 
has hereunto set his hand and seal the day and year first 
above written. 

[seal.] McCokmick Harvesting Machine Co., 

By Cyrus H. McCormick, President. 

Attest: 

Harold F. McCormick, Secretary. 
Wm. C. Lane. 



EXHIBIT 2. 

This agreement, made in the city of New York this 13th 
day of August, 1902, by and between William C. Lane, party 
of the first part, and George W. Perkins, Charles Deering, 
and Cyrus H. McCormick (hereinafter called the " Voting 
Trustees' 7 ) , parties of the second part, witnesseth as follows: 

Whereas the International Harvester Co. (hereinafter 
called the "Company") is a corporation organized under 
the laws of the State of New Jersey, with a capital stock of 
$120,000,000, divided into 1,200,000 shares of the par value 
of $100 each, all of which stock has been issued and is out- 
standing; and 

Whereas the party of the first part has caused to be deliv- 
ered to the Voting Trustees certificates for fully paid shares 
of the capital stock of the company to the amount of its 
entire capital stock (excepting such shares as are necessary 
to qualify directors), and said certificates, together with 
such other certificates for stock of the company as hereafter, 
from time to time, may be delivered hereunder, are to be 
held and disposed of by the Voting Trustees under and pur- 
suant to the terms and conditions hereof: Now, therefore, 

First. The Voting Trustees agree with the party of the first 
part, and with each and every holder of stock trust certifi- 
cates issued as hereinafter provided, that from time to time, 
upon request, they will cause to be issued to the party of the 
first part, or upon his order, in respect of said stock of the 
company received from him, certificates in substantially 
the following form : 

International Harvester Co. 
No. Shares 

STOCK TRUST CERTIFICATES. 

This certifies that, as hereinafter provided, — will be 

entitled to receive a certificate or certificates for 

fully paid shares, of $100 each, of the capital stock of the 
International Harvester Co., and, in the meantime, to 
receive payments equal to the dividends, if any, collected by 
the undersigned Voting Trustees upon a like number of such 

(56) 



57 

shares standing in their names; such dividends, if received 
by the Voting Trustees in stock of said company, to be 
payable in stock trust certificates. Until the actual delivery 
of such stock certificates, the Voting Trustees shall possess, in 
respect of any and all of such stock, and shall be entitled, in 
their discretion, to exercise all rights and powers of absolute 
owners of said stock, including the right to vote for every 
purpose and to consent to any corporate act of said company; 
it being expressly stipulated that no voting right passes by 
or under this certificate, or by or under any agreement 
expressed or implied. 

This certificate is issued pursuant to, and the rights of the 
holder are subject to, and limited by, the terms and condi- 
tions of a certain agreement, dated the 13th day of August, 
1912, by and between William C. Lane and the undersigned 
Voting Trustees. 

Stock certificates shall be due and deliverable in exchange 
for stock trust certificates on, but not before, August 1, 1912, 
unless a majority of the Voting Trustees elect, as they may, 
to terminate said agreement after August 1, 1907, upon not 
less than 90 days' notice. 

This certificate is transferable only on the books of the 
Voting Trustees by the registered holder thereof, either in 
person or by attorney duly authorized, according to the rules 
established for that purpose by the Voting Trustees, and on 
surrender thereof; and, until so transferred, the Voting 
Trustees may treat the registered holder as owner hereof for 
all purposes whatsoever, except that they shall not be 
required to deliver stock certificates hereunder without 
surrender hereof. 

This certificate is not valid unless duly signed on behalf of 

the undersigned Voting Trustees by their agents and 

also registered by as registrar. 

In witness whereof, the undersigned Voting Trustees have 
caused this certificate to be signed by their duly authorized 

agents , this day of , 190-. 

Voting Trustees. 

By (their agents). 

By , President. 

Registered this day of , 19 — . 

By , Registrar. 

By , Secretary. 



58 

Second. At any time after August 1, 1907, if a majority 
of the Voting Trustees so decide, this agreement may be 
terminated; but at least 90 days' notice of an intention to 
terminate this agreement must be given by the Voting 
Trustees according to the provisions of article 10 hereof. 
This agreement shall in any event terminate on Angust 1, 
1912, without notice by or action of the Voting Trustees. 
On August 1, 1912, or upon the earlier termination of this 
agreement, the Voting Trustees, in exchange for, or upon 
surrender of, any stock-trust certificate then outstanding, 
shall, in accordance with the terms hereof, deliver proper 
certificates of stock of the company, and may require the 
holders of stock-trust certificates to exchange them for cer- 
tificates of capital stock. 

In case on or after the termination of said agreement the 
Voting Trustees shall deposit with an incorporated bank or 
trust company of good standing, having an office in the city 
of New York, stock certificates properly indorsed for transfer 
in blank, representing stock of the company to a par amount 
equal to the par amount of the stock-trust certificates out- 
standing, with authority in writing to such bank or trust 
company to deliver the same in exchange for stock-trust 
certificates when and as surrendered for exchange as herein 
provided, then all further liability of said trustees, or any of 
them, for the delivery of stock certificates in exchange for 
stock-trust certificates shall cease and determine. 

Third. The term company, for the purposes of this agree- 
ment and for all rights thereunder, including the issue and 
delivery of stock, shall be taken to mean the said corporation 
organized under the laws of the State of New Jersey, or any 
successor corporation or corporations into which the same 
may be consolidated or merged. 

Fourth. From time to time hereafter, the Voting Trustees 
may receive any additional fully paid shares of the capital 
stock of the company, and in respect of all such shares so 
received will issue and deliver certificates similar to those 
above mentioned, entitling the holders to the rights above 
specified. In case the company shall hereafter have both 
common and preferred stock, the Voting Trustees may re- 
ceive, subject to the provisions hereof, certificates repre- 
senting fully paid stock of each class, and the stock-trust 
certificates shall indicate upon their face whether they repre- 



59 

sent common or preferred stock, and holders of stock-trust 
certificates representing one class of stock shall have no 
interest in or claim upon stock of the other class. In any 
such event the stock-trust certificates outstanding shall be 
surrendered by the holders thereof in exchange for new cer- 
tificates specifying the class of stock, whether preferred or 
common, represented thereby. In case the Voting Trustees 
shall receive any stock of the company issued by way of 
dividend upon stock held by them subject to said agreement, 
they shall hold such stock subject to the terms of said agree- 
ment, and shall issue stock-trust certificates representing such 
stock to the respective registered holders of the then out- 
standing stock-trust certificates entitled to such dividend. 

Fifth. Any Voting Trustee may, at any time, resign by 
delivering to the other trustees, in writing, his resignation, 
to take effect 10 days thereafter. In case of the death or 
the resignation or the inability of any Voting Trustee to act, 
the vacancy so occurring shall be filled by the appointment 
of a successor or successors, to be made as follows : Any suc- 
cessor in the line of succession to George W. Perkins shall 
be appointed by J. P. Morgan & Co., as said firm now is or 
may hereafter be constituted. Any successor in the line of 
succession to Charles Deering shall be appointed by James 
Deering, or, in case of his failure to act, by Richard F. 
Howe, and, in case of the failure of either to act, by the 
other two Voting Trustees. Any successor in the line of 
succession to Cyrus H. McCormick shall be appointed by 
Harold F. McCormick, or, in case of his failure to act, by 
Stanley McCormick, and, in case of the failure of either to 
act, by the other two Voting Trustees. The term Voting 
Trustee as used herein and in said certificates shall apply 
to the parties of the second part and their successors here- 
under. 

Sixth. The Voting Trustees may adopt their own rules of 
procedure. The action of a majority of the Voting Trustees 
expressed from time to time at a meeting or by writing with 
or without a meeting, shall, except as otherwise herein stated, 
constitute the action of the Voting Trustees and have the 
same effect as though assented to by all. Any Voting Trustee 
may vote in person or by proxy and may act as a director or 
officer of the company. 



60 

Seventh. In voting the stock held by them, the Voting 
Trustees will exercise their best judgment from time to time 
to secure suitable directors, to the end that the affairs of the 
company shall be properly managed, and in voting and in 
acting on other matters which shall come before them as 
stockholders, or at stockholders' meetings, will likewise exer- 
cise their best judgment, but they assume no responsibility 
in respect of such management or in respect of any action 
taken by them or taken in pursuance of their consent thereto 
as such stockholders, or in pursuance of their votes so cast, 
and no voting trustee shall incur any responsibility by reason 
of any error of law or of any matter or thing done or suffered 
or omitted to be done under this agreement, except for his 
own individual willful malfeasance. 

Eighth. The Voting Trustees possess and shall be entitled, 
in their discretion, to exercise, until the actual delivery of 
stock certificates in exchange for stock-trust certificates, all 
rights and powers of absolute owners of said stock, including 
the right to vote for every purpose and to consent to any 
corporate act of said company, it being expressly stipulated 
that no voting right passes to others by or under said stock- 
trust certificates, or by or under this agreement, or by or 
under any agreement, expressed or implied. The Voting 
Trustees shall not, however, during the pendency of this 
agreement, vote in respect of the shares of the capital stock 
of the company held by them, to authorize or consent to any 
mortgage or other lien upon the property of the company, or 
(except as herein otherwise specifically provided) to authorize 
any increase or diminution in the amount of the authorized 
capital stock of said company, except with the consent in 
each instance of the holders of stock-trust certificates repre- 
senting two-thirds in amount of each class of stock at the 
time deposited hereunder, given in writing, or by vote at a 
meeting called for that purpose ; provided, however, that the 
Voting Trustees may, in their discretion, prior to July 1, 1903, 
without the consent of holders of any stock-trust certifi- 
cates, consent to and authorize the increase of the company's 
capital stock to an amount not exceeding $180,000,000. 

Ninth. For the purpose of this agreement any consent 
in writing by the holders of stock-trust certificates may be 
in any number of concurrent instruments of similar tenor, 



61 

and may be executed by the certificate holders in person 
or by agent or attorney appointed by an instrument in 
writing. Proof of the execution of any such consent, or of 
a writing appointing any such agent or attorney, or of the 
holding by any person of stock-trust certificates issued 
hereunder, shall be sufficient for any purpose of this inden- 
ture, and shall be conclusive in favor of the Voting Trustees 
with regard to any action taken by them under such con- 
sent, if made in the following manner, viz : (a) The fact and 
date of the execution by any person of any such consent 
may be proved by the certificate of any notary public or 
other officer authorized to take, either within or without the 
State of New York, acknowledgment of deeds to be recorded 
in any State, certifying that the person signing such consent 
acknowledged to him the execution thereof, or by the 
affidavit of a witness to such execution, (b) The amount 
of stock-trust certificates held by any such person executing 
any such consent, and the issue of the same, may be proved 
by a certificate executed by any trust company, bank, or 
other depositary (wheresoever situated) whose certificate 
shall be deemed by the Voting Trustees to be satisfactory, 
showing that at the date therein mentioned such person 
had on deposit with such depositary, or exhibited to it, the 
stock-trust certificates numbered and described in such 
depositary's certificate. 

Tenth. All notices to be given to the holders of stock-trust 
certificates hereunder shall be given either by mail to the 
registered holders of stock-trust certificates at the addresses 
furnished by such holders to the Voting Trustees or to the 
agents of the Voting Trustees, or by publication in two 
daily papers of general circulation in the city of New York 
and in two daily papers of general circulation in the city of 
Chicago, twice in each week for two successive weeks; and 
any call or notice whatsoever, when either mailed or pub- 
lished by the Voting Trustees as herein provided, shall be 
taken and considered as though personally served on all 
parties hereto, including the holders of said stock-trust cer- 
tificates, and such mailing or publication shall be the only 
notice required to be given under any provision of this 
agreement. 






62 






Eleventh. This agreement may be simultaneously exe- 
cuted in several counterparts, each of which so executed 
shall be deemed to be an original, and such counterparts 
shall together constitute but one and the same instrument. 
In witness whereof the several parties have hereunto set 
their hands and seals in the city of New York the day and 
year first herein above mentioned. 

, [l- s.] 

, [l. s J 

, [l. s.] 

, [l. s.] 



Voting Trustees. 



o 



LBA P '!3 



